Remuneration in 2015
The annual short-term incentives paid in 2015 to the members of senior management were measured by the Group’s profitability and cash flow, divisional targets and success in reaching personal targets. The performance criteria also included indicators related to sustainability targets. The STI payments for the senior management remained below the 20% target level.
In 2015, the three-year earning period (2012-2014) of the company’s long-term incentive plan 2012-2017 resulted in a payment close to the target level (48.4% of maximum). As a result, after deduction of taxes and tax related expenses, the total reward corresponded to 207,403 net shares, 55,794 of which were awarded to members of Fortum Executive Management. In addition, 30,271 shares were delivered to the former President and CEO Tapio Kuula.
In December 2015, the Board of Directors approved the commencement of a new long-term incentive plan for 2016-2021. The Board-approved earning criteria for the earning period 2016-2018 are based on earnings per share (EPS) and return for shareholders. Approximately 110 key employees were included in the plan.
The table below includes the salaries and fringe benefits, short-term bonus and long-term share bonus payments to the President and CEO and to Fortum Executive Management during the year. Short-term bonus (STI) payments are based on the 2014 targets and achieved results. The long-term share bonus (LTI) includes the shares delivered during the year. The table also includes payments made to supplementary pension arrangements for the President and CEO and for Fortum Executive Management.
|Thousand of euros
(President and CEO since 7 Sep 2015)
(Interim President and CEO until 6 Sep 2015) 1)
(President and CEO until 31 Jan 2015) 2)
|Salaries and fringe benefits
|Long-term share bonus
1) Includes the payments CFO Timo Karttinen received during his position as Fortum’s Interim President and CEO during 1 February – 6 September 2015 and as a substitute to the President and CEO in January 2015. Also included is a lump sum payment of EUR 70,000 for his success in assuming the responsibilities of Interim President and CEO.
2) Long-term share bonus includes the gross payment Tapio Kuula received from the share plans commenced in 2012, 2013 and 2014. Mr. Kuula received the net amount of the payment as shares, after deducting the taxes and tax-related charges arising from the payment. These shares, totalling 30,271 shares, are under lock-up until the spring 2018.
3) Includes remuneration of CFO Timo Karttinen from 7 September onwards.
4) Former CFO Markus Rauramo was granted a recruitment bonus in 2012 that was paid in three installments of EUR 33,334 in 2012, 2013 and 2014.
The STI bonus and LTI share bonus payments to Fortum Executive Management members, including the President and CEO, amounted to a total of EUR 3,479 thousand (2014: 2,549), which corresponds to 1.32% (2014: 0.92%) of the total compensation in the Fortum Group. The figures exclude payments to the employees of the divested electricity distribution business. The increase arises from the bonuses paid to the former President and CEO Tapio Kuula.
Tapio Kuula served as Fortum’s President and CEO until 31 January 2015. In the Annual General Meeting on 31 March 2015, he was elected Member of the Board of Directors of Fortum. According to Fortum’s remuneration principles, members of the Board of Directors cannot participate in Fortum’s annual bonus or share bonus programme.
Mr. Kuula’s salary, fringe benefits and holiday payments in 2015 were EUR 279,261. In April 2015, he was paid his annual bonus of EUR 170,037 for the year 2014. In addition, Mr. Kuula earned long-term share bonuses amounting to EUR 1,145,660 (gross) from the share plans commenced in 2012, 2013 and 2014. Mr. Kuula received the net amount of the payment as shares, after deducting the taxes and tax-related charges arising from the payment. These shares, totalling 30,271 shares, are under lock-up until the spring 2018.
Timo Karttinen served as substitute to the President and CEO during Mr. Kuula’s sick leave in January 2015 and as Fortum’s Interim President and CEO from 1 February to 6 September 2015. During this time, he received a salary of EUR 35,000/month, including free car allowance and phone allowance as fringe benefits. Additionally, Mr. Karttinen received a lump-sum payment of EUR 70,000 in October 2015 based on his successful work during the challenging period when he assumed the responsibilities of Interim President and CEO alongside his CFO role.
Number of shares delivered to management
The following table shows the number of Fortum shares delivered to the President and CEO and to other Fortum Executive Management members under the long-term incentive plans.
|Pekka Lundmark (President and
CEO since 7 September 2015)
|Tapio Kuula (President and CEO
until 31 January 2015) 1)
|Alexander Chuvaev 2)
|Esa Hyvärinen (member of
the FEM from 1 March 2014)
|Kari Kautinen (member of
the FEM from 1 March 2014)
|Sirpa-Helena Sormunen (member of the FEM from 1 September 2014)
|Tiina Tuomela (member of
the FEM from 1 March 2014)
|Kaarina Ståhlberg (member of
the FEM until 31 March 2014)
1) Includes the shares Tapio Kuula received from the share plans commenced in 2012, 2013 and 2014. The shares are under lock-up until the spring 2018.
2) Share rights will be paid in cash instead of shares after the three-year lock-up period due to local legislation
3) Share delivery based on share plan 2012–2017
4) Share delivery based on share plans 2008–2012 and 2011–2016